The signal just released by the Fed may be more important than many people think.

The nearly three-year-long quantitative tightening has come to an end, and the moment for a shift in monetary policy has arrived. This is not just a technical adjustment; it significantly affects the flow of funds in the entire capital market.

What was revealed in this meeting?

Three key actions are worth noting:

First, the quantitative tightening has officially come to an end. The market is no longer facing continuous bloodletting, and the situation of tight liquidity is beginning to ease. What does the end of a 1095-day tightening cycle mean? The funding environment is changing.

Secondly, the benchmark interest rate has been lowered by 25 basis points. Lower financing costs are typically not bad news for risk assets.

Thirdly, there are $30 billion in maturing bond funds reinvested into the market each month. This amount is not insignificant, equivalent to a continuous injection of liquidity.

Three actions combined convey a clear message: money is starting to loosen.

What are institutions looking at?

Interestingly, while most people are still watching, funds are already moving. Over the past month, institutional funds flowing into the crypto space have increased by 47%. Where is their focus? Layer 2.

Why is Layer2 favored? When liquidity returns, funds need to seek on-chain infrastructure that is more efficient and cost-effective. This logic does not